Victoria's 79 local councils are responsible for maintaining infrastructure estimated to be worth $37 billion.395 The local councils provide and maintain infrastructure such as local roads, bridges, footpaths, water and stormwater drains, waste disposal and public buildings, parks and recreational facilities.
Despite significant spending by local government in Victoria on constructing, improving and maintaining its assets, there is a significant gap between the public's expectations about the quality and variety of available local government assets and its capacity to meet these expectations. In 2002, for example, the Auditor-General released a report on the management of roads by local government that assessed the condition of existing road infrastructure and identified a $1.4-$2.75 billion deficit for maintenance and renewal of ageing infrastructure.396 And the Municipal Association of Victoria (MAV) recently calculated an annual infrastructure spending shortfall of $310 million for Victorian councils over the next five years.397
Local government in Victoria has annual revenue of $4.7 billion, more than 55 per cent of which it raises from rates.398 Two-thirds of the remainder comes from grants from the Victorian Government ($547.93 million399) and the federal government.
Councils have the power to borrow money to enable them to perform their functions.400 However, before entering into a partnership they are required to receive approval from the Minister for Local Government and the Treasurer.401
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395 Municipal Association of Victoria (MAV), fact sheet Council responsibilities, see: www.mav.asn.au, accessed 10 August 2006
396 Victorian Auditor-General's Office, Management of roads by local government, June 2002, p.51
397 Municipal Association of Victoria, Local Government Cost Pressures, fact sheet
398 Municipal Association of Victoria, 'Councils under pressure to increase rates', media release, 1 July 2006
399 Municipal Association of Victoria, Overview of the 2006-07 State Budget, p.7
400 Local Government Act 1989, s.144
401 Local Government Act 1989, s.193 (5C) provides details of the level of investment by councils that requires approval by the Treasurer and the Minister for Local Government